Canada's new Stablecoin Act creates a federal registration and oversight regime for stablecoin issuers

Plain-language summary · AI-assisted · not legal advice

The Stablecoin Act establishes a mandatory federal framework for anyone who creates and makes a stablecoin available for purchase in Canada (with interprovincial or international reach). No one may issue a stablecoin unless their name appears on a Bank of Canada public registry, which requires submitting a detailed application — including ownership structure, technology descriptions, redemption policy, independent legal and accounting statements, and governance policies — along with a Bank-determined fee. Registered issuers must maintain a fully backed reserve of high-quality liquid assets held with qualified custodians, segregated from other assets and unavailable to general creditors; they are prohibited from paying interest or yield on stablecoins and from representing them as legal tender, deposits, or government-insured instruments. Issuers must publish and file ongoing reports (including monthly reserve statements), notify the Bank promptly of incidents and significant changes, and comply with governance, risk management, data security, and recovery-and-resolution policies. The Bank of Canada supervises compliance and can issue directions, require undertakings, impose conditions, and recommend that the Minister of Finance prohibit an issuer from operating; the Minister holds separate national-security powers including the ability to review applications, impose conditions, and order a prohibition. Financial institutions and central banks are generally exempt, and transitional regulations may provide a grace period for issuers already operating when the registration requirement takes effect.

Who this affects: stablecoin issuers · digital asset businesses · financial technology companies · compliance and legal teams at crypto firms · qualified custodians holding reserve assets